Hey Folks, While the market was obsessing over chipmakers and software darlings, a notable rally has been building in the infrastructure layer — the companies that store, test, and move the data behind every AI model, every data center expansion, and every autonomous vehicle training run.
Global data generation is expected to triple by 2029, and four stocks have been quietly capitalizing on that trend!
Here's why they're worth watching right now... | | | 1. SanDisk (SNDK) — The Flash Memory Leader
SanDisk is the best-performing stock in the S&P 500, up over 129% year to date. The company spun off from Western Digital in early 2025 and has been on a parabolic run ever since.
SanDisk makes the flash memory and solid-state drives that data centers depend on for fast-access storage — think of it as AI's short-term memory, handling the data models are actively working with.
- Revenue climbed 61% year-over-year and 31% quarter-over-quarter. Non-GAAP EPS came in at $6.20 versus the $3.33 consensus, nearly doubling expectations. Gross margin hit 51.1%, a 21-point sequential improvement.
- Data center revenue surged 76% year-over-year, reaching $440 million. Free cash flow hit $843 million and the company paid down $750 million in debt.
- Forward guidance stunned the street: revenue of $4.4–$4.8 billion, gross margins of 65–67%, and EPS of $12–$14 — roughly double what analysts had modeled.
- Management projects massive AI storage demand growth through 2027 and has signed a major long-term supply agreement with one of the world's largest cloud providers, which is paying upfront to lock in capacity.
2. Teradyne (TER) — The Chip Testing Gatekeeper
Teradyne is the second-best performer in the S&P 500, yet most investors couldn't tell you what the company does. That's exactly what makes it interesting. Teradyne sits at two critical intersections of the AI economy: semiconductor testing and collaborative robotics — and both segments are delivering strong results.
- Every chip destined for a phone, car, or data center must be tested before it ships — Teradyne makes the machines that do it. AI chips are far more complex than traditional processors, requiring longer and more sophisticated testing, which translates into higher revenue per chip.
- The company also owns Universal Robots, the world's leading collaborative robot maker with over 100,000 units deployed, plus MiR, which builds autonomous mobile robots for warehouses and factories.
- Q4 revenue rose 44% year-over-year, profit nearly doubled, and semiconductor test revenue alone hit $883 million. Q1 2026 guidance calls for $1.15–$1.25 billion in revenue with EPS up to $2.25, above consensus.
- In December 2025, Teradyne announced a new U.S. manufacturing hub in Michigan to build collaborative robots for American factories, signaling acceleration in its robotics segment.
3. Seagate Technology (STX) — The Power-Efficient Storage Play
Seagate has been making hard drives since 1978, but there is nothing old-school about what's happening with this stock right now — up roughly 50% year to date and accelerating.
The key differentiator?
Its proprietary HAMR technology, branded Mosaic, which uses tiny bursts of laser heat to pack data far more densely onto each disc — fitting about 30 terabytes into a single drive using the same physical size and the same electricity as older models.
- That 40% storage capacity increase with zero additional power consumption addresses the biggest bottleneck in data center expansion: electricity. With power constraints limiting how fast facilities can scale, Seagate's offering has become critical.
- Over 1.5 million Mosaic devices have shipped. Five of the world's largest cloud companies are using them, production is booked through 2026, and supply deals are being negotiated into 2028.
- Quarterly revenue hit $2.8 billion, up 21.5% year-over-year, beating estimates. EPS reached $3.11, up 53%. The data center segment drove $2.1 billion — 80% of total revenue — growing 34%. Non-GAAP gross margin reached a record 42.2%.
- Cantor Fitzgerald raised its target to $650, the street average sits around $468, and the highest target is $700. The company also pays a $0.74 per share dividend.
| | | 4. Western Digital (WDC) — The Archival Storage Backbone
Western Digital is up roughly 51% year to date, and for a stock that Wall Street considered a boring legacy hardware play just twelve months ago, that kind of move stands out.
The AI infrastructure wave has reshaped the narrative. The company makes the high-capacity hard drives that serve as the archival backbone of data centers worldwide — and demand continues to climb.
- Revenue growth is running at 30% year-over-year, with fiscal 2026 revenue tracking around $12.4 billion. Management is guiding for 44–45% gross margins — excellent for hardware.
- Analysts expect EPS to grow 57% this fiscal year and 41% the next, exceptional growth for a business that was recently dismissed as unexciting.
- Morgan Stanley named it a top 2026 pick with an overweight rating, Cantor Fitzgerald flagged it as a top storage play, and BofA raised its price target to $375.
- The thesis is straightforward: AI generates data, data needs storage, Western Digital builds that storage. While the company is still developing its own heat-assisted recording technology where Seagate currently leads, demand is large enough to support both.
Four companies, four different angles, one clear infrastructure tailwind. These are the picks and shovels building the physical backbone that makes all of it run...
Anyways...
That's all for now!
Until Next Time,
-ZT Team | P.S. Want our text alerts? Text "ZIPTRADER" to 1-(855)-228-1598 to sign up!
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